Bonnie Cao

China's new-home price increases eased across the country last month amid tighter credit that led to developer discounts.

Home prices from the first-tier cities to those less affluent all weakened in March, according to the National Bureau of Statistics. Prices in Beijing rose 10 per cent from a year earlier, the slowest since April last year, while those in Shanghai added 13 per cent, the smallest since June. The eastern city of Wenzhou fell 3.9 per cent from a year ago.

Developers including Agile Property Holdings and Wharf Holdings cut prices in some eastern cities this year as market sentiment weakened on tight liquidity. China's broadest measure of new credit fell 19 per cent in March from a year earlier and money supply grew at the slowest pace on record, central bank data showed.

''Right now, the buyers are still willing, they're just constrained because they can't get the debt. If sentiments start deteriorating, that's a much bigger problem.''

Among China's second-tier cities, the eastern city of Hangzhou, the provincial capital of Zhejiang, posted a 7.8 per cent gain from a year earlier, the slowest since July. ''There are definitely risks in the property market of China's smaller cities,'' Lan Shen, an economist at Standard Chartered Plc in Beijing, said. ''The property market will be a big factor that presses the country's economic growth this year.''

Premier Li Keqiang said last month the government will regulate the housing market differently in different cities to take into account local conditions.